BEIJING, March 26, 2015 (GLOBE NEWSWIRE) -- ChinaCache International Holdings Ltd. ("ChinaCache" or the "Company") (Nasdaq:CCIH), the leading total solutions provider of Internet content and application delivery services in China, today announced its unaudited condensed consolidated financial results for the fourth quarter and full fiscal year ended December 31, 2014.

Highlights for the Fourth Quarter of 2014

Net revenues in the fourth quarter were RMB338.9 million (US$54.6 million) as compared with RMB339.4 million in the fourth quarter of 2013.

Gross profit in the fourth quarter was RMB101.7 million (US$16.4 million), reflecting a 30.0% gross profit margin in the fourth quarter.

Financial results in the fourth quarter were impacted by a one-time RMB32.5 million (US$5.2 million) non-cash bad debt provision related to a single customer from previous years.

Excluding this one-time non-cash bad debt provision of RMB32.5 million (US$5.2 million), adjusted net income per diluted ADS (non-GAAP) was RMB0.59 (US$0.09) in the fourth quarter of 2014 as compared to an adjusted net loss per ADS of RMB0.31 in the fourth quarter of 2013.

Highlights for the Full Year 2014

Net revenues in 2014 reached a record high of RMB1,384.3 million (US$223.1 million), representing a 25.5% increase over the previous year.

Gross profit in 2014 was RMB417.7 million (US$67.3 million), up 20.5% from 2013.

Excluding the one-time non-cash bad debt provision of RMB32.5 million (US$5.2 million) from the fourth quarter 2014, the adjusted EBITDA (non-GAAP) in 2014 was RMB135.5 million (US$21.8 million) and adjusted net income (non-GAAP) in 2014 was RMB38.9 million (US$6.3 million).

Excluding this one-time non-cash bad debt provision of RMB32.5 million (US$5.2 million), adjusted net income per diluted ADS (non-GAAP) was RMB1.46 (US$0.24) for the full-year 2014 as compared to an adjusted net loss per ADS of RMB0.79 for the full-year 2013.

"Our record revenue in 2014 reflects the strong capability, flexibility and reliability of our network and content delivery technology in meeting the expanding demands of our diversified customers. We have a leading position in high growth sectors such as video and mobile, as well as the capabilities in providing customized services to large e-commerce enterprises and online media companies," said Mr. Song Wang, Founder, Chairman and Chief Executive Officer of ChinaCache.

"Our fourth quarter revenue was impacted by our decision to accelerate customer migration onto our next-generation High Performance Cloud Cache ("HPCC") platform, which resulted in less available bandwidth and service capacity. However, as we are on track in completing the migration in the first quarter of 2015, we can now offer enhanced services and a more efficient network to all our customers, which will strengthen our long-term competitive position and our ability to address a rapidly growing market. Going forward, with our industry-leading infrastructure, customers will experience faster, more reliable service, and we will benefit from higher bandwidth reuse, and greater capacity through a more balanced network system," concluded Mr. Wang.

Fourth Quarter 2014 Financial Results

Net revenues for the fourth quarter of 2014 were RMB338.9 million (US$54.6 million), representing a 9.7% decrease from the third quarter of 2014 and a 0.2% decrease from the corresponding period in 2013. The decrease in net revenues was due to bandwidth and service capacity interruption as customers continue to migrate onto the next-generation HPCC platform in the fourth quarter of 2014 as compared with the previous quarter. The Company expects the HPCC migration to be near completion by end of first quarter of 2015.

Cost of revenues for the fourth quarter decreased by 9.3% quarter-over-quarter, and increased by 2.1% year-over-year to RMB237.2 million (US$38.2 million). Gross margin was 30.0%, compared to 30.3% in the previous quarter and 31.6% in the corresponding period in 2013. Non-GAAP gross margin, which excludes share-based compensation, was 30.0%, compared to 30.4% in the third quarter and 31.7% in the corresponding period in 2013.

Sales and marketing expenses for the fourth quarter decreased by 4.8% from the previous quarter to RMB29.2 million (US$4.7 million) and decreased by 23.3% year-over-year, representing 8.6% of net revenues. The decrease in sales and marketing expenses was primarily attributable to reduced personnel-related expenses due to less commission paid in the fourth quarter of 2014 as compared with the previous quarter.

General and administrative expenses for the fourth quarter increased by 73.5% from the previous quarter to RMB73.8 million (US$11.9 million) and increased by 70.0% year-over-year, representing 21.8% of net revenues. The increase in general and administrative expenses was primarily attributable to RMB32.5 million in accruals for bad debt provision from one single customer from previous years. Excluding the one-time non-cash bad debt provision of RMB32.5 million incurred from a single client, general and administrative expenses for the fourth quarter were RMB41.3 million (US$6.7 million), representing a decrease of 3.0% from the previous quarter and a decrease of 5.0% year-over-year, representing 12.2% of net revenues.

Research and development expenses for the fourth quarter decreased by 6.4% from the previous quarter to RMB28.1million (US$4.5 million), and decreased by 8.0% year-over-year, representing 8.3% of net revenues. The decrease was mainly attributable to improved cost control measures enacted throughout the Company.

Adjusted EBITDA (non-GAAP), defined as EBITDA excluding share-based compensation expense, foreign exchange gain/(loss) and impairment of an available-for-sale investment, was RMB12.1 million (US$2.0 million) in the fourth quarter of 2014, as compared with RMB20.3 million in the fourth quarter in 2013. Excluding the one-time non-cash bad debt provision of RMB32.5 million incurred from a single client, adjusted EBITDA was RMB44.7 million (US$7.2 million).

Operating loss was RMB29.4 million (US$4.7 million) in the fourth quarter of 2014, compared to operating income of RMB10.7 million in the previous quarter and an operating loss of RMB6.0 million in the corresponding period in 2013. Excluding share-based compensation expense and impairment of an available-for-sale investment, non-GAAP operating loss was RMB20.8 million (US$3.4 million), compared with a non-GAAP operating income of RMB12.6 million in the third quarter of 2014 and a non-GAAP operating loss of RMB1.1 million in the fourth quarter of 2013. Further excluding the one-time non-cash bad debt provision of RMB32.5 million incurred from a single client, the Company had a non-GAAP operating income of RMB11.7 million (US$1.9 million) in the fourth quarter of 2014.

Income tax benefit was RMB3.0 million (US$0.5 million) in the fourth quarter of 2014, compared to income tax expense of RMB2.6 million in the third quarter of 2014 and RMB9.4 million in the corresponding period in 2013.

Net loss was RMB20.6 million (US$3.3 million) in the fourth quarter of 2014, compared to net income of RMB0.6 million in the third quarter of 2014, and net loss of RMB14.0 million in the corresponding period in 2013. Net loss per basic and diluted American Depositary Share ("ADS") for the fourth quarter of 2014 was RMB0.80 (US$0.13) and RMB0.80 (US$0.13), respectively. Each ADS represents 16 ordinary shares of the Company.

Adjusted net loss (non-GAAP), defined as net loss before share-based compensation expense, foreign exchange gain/(loss), penalties on uncertain tax positions and impairment of an available-for-sale investment, was RMB16.8 million (US$2.7 million), compared to adjusted net income (non-GAAP) of RMB8.9 million in the third quarter of 2014 and adjusted net loss (non-GAAP) of RMB7.2 million in the corresponding period in 2013. Non-GAAP net loss per basic and diluted ADS for the fourth quarter of 2014 amounted to RMB0.65 (US$0.11) and RMB0.65 (US$0.11), respectively.

Excluding the one-time non-cash bad debt provision of RMB32.5 million incurred from a single client, adjusted net income (non-GAAP) was RMB15.7 million (US2.5 million). As a result, the adjusted net income per basic and diluted ADS (non-GAAP) for the fourth quarter of 2014 amounted to RMB0.61 (US$0.10) and RMB0.59 (US$0.09) respectively.

Full Year 2014 Financial Results

For the full year ended December 31, 2014, net revenues were RMB1,384.3 million (US$223.1 million), representing a 25.5% increase from the previous year. Gross profit in 2014 increased 20.5% to RMB417.7 million (US$67.3 million), representing a gross profit margin of 30.2%.

Adjusted EBITDA (non-GAAP) in 2014 was RMB103.0 million (US$16.6 million), a 123.1% increase from the previous year. Net loss in 2014 was RMB6.8 million (US$1.1 million), compared to a net loss of RMB34.2 million in 2013.

Adjusted net income (non-GAAP) was RMB6.4 million (US$1.0 million) in 2014, compared to an adjusted net loss of RMB18.0 million in 2013.

Excluding the one-time non-cash bad debt provision of RMB32.5 million incurred from a single client, adjusted EBITDA (non-GAAP) in 2014 was RMB135.5 million (US$21.8 million), and adjusted net income (non-GAAP) was RMB38.9 million (US$6.3 million) in 2014.

Balance Sheet

As of December 31, 2014, the Company had cash and cash equivalents of RMB375.9 million (US$60.6 million). In addition, the Company had an available-for-sale investment amounting to RMB25.2 million (US$4.1 million) in an RMB-denominated fund, which is presented as a current asset.

Capital expenditures for the fourth quarter and full year of 2014 were RMB66.6 million (US$10.7 million) and RMB259.3 million (US$41.8 million) respectively.

First Quarter and Full Year 2015 Revenue Guidance

For the first quarter of 2015, ChinaCache expects its total net revenues to be between RMB340.0 million and RMB350.0 million, representing an increase of 5.0% to 8.0% over the first quarter of 2014.

For 2015, ChinaCache expects that its full-year total net revenues will grow by 25% to 30% over 2014.

Conference Call Information

The Company has scheduled a conference call to discuss these results at 8:00 PM Eastern Time on March 26, 2015, which corresponds to 8:00 AM Beijing time on March 27, 2015.

The dial-in details for the live conference call are as follows:

U.S. dial-in number: +1 (845) 675-0438

Hong Kong dial-in number: +852 3018-6776

International dial-in number: +65 6723-9385

China dial-in number: 400-1200-654

Conference ID: 7524177

A live and archived webcast of the conference call will be available on the Investor Relations section of ChinaCache's website at ir.chinacache.com

A replay of the conference call will also be available approximately two hours after the conclusion of the live call until April 1, 2015 by dialing:

U.S. dial-in number: +1 (855) 452-5696

International dial-in number: +61 (2) 9003-4211

China dial-in number: 400-632-2162

Conference ID: 7524177

About ChinaCache International Holdings Ltd.

ChinaCache International Holdings Ltd. (Nasdaq:CCIH) is the leading total solutions provider of Internet content and application delivery services in China. As a carrier-neutral service provider, ChinaCache's network in China is interconnected with networks operated by all telecom carriers, major non-carriers and local Internet service providers. With more than a decade of experience in developing solutions tailored to China's complex Internet infrastructure, ChinaCache is a partner of choice for businesses, government agencies and other enterprises to enhance the reliability and scalability of online services and applications and improve end-user experience. For more information on ChinaCache, please visit ir.chinacache.com.

*Use of Non-GAAP Financial Measures

In evaluating its business, ChinaCache considers and uses the following non-GAAP measures defined as non-GAAP financial measures by the SEC as supplemental measures to review and assess its operating performance: non-GAAP gross profit, non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses, non-GAAP research and development expenses, non-GAAP operating income/(loss), adjusted net income/(loss) (non-GAAP), EBITDA and adjusted EBITDA (non-GAAP). The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of Non-GAAP to GAAP Financial Measures" set forth at the end of this press release.

To present non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses and non-GAAP research and development expenses, the Company excludes share-based compensation expense.

The Company uses EBITDA to assist in reconciliation to adjusted EBITDA. The Company defines EBITDA as net income/(loss) before interest expense, interest income, income tax expense and penalties on uncertain tax positions and depreciation and amortization. The Company defines adjusted EBITDA as EBITDA before share-based compensation expense, foreign exchange gain/(loss) and impairment of an available-for-sale investment that the Company does not consider reflective of its ongoing operations. The Company believes that the use of adjusted EBITDA facilitates investors' use of operating performance comparisons from period to period and company to company by backing out potential differences caused by variations in items such as capital structure (affecting relative interest expense and share-based compensation expense), the book amortization of intangibles (affecting relative amortization expense), the age and book value of facilities and equipment (affecting relative depreciation expense) and other non-cash expenses. The Company also presents adjusted EBITDA because it believes it is frequently used by securities analysts, investors and other interested parties as a measure of the financial performance of companies in its industry.

Those non-GAAP financial measures are not defined under U.S. GAAP and are not measures presented in accordance with U.S. GAAP. Those non-GAAP financial measures have limitations as analytical tools, and when assessing the Company's operating performance, investors should not consider them in isolation, or as a substitute for net income or other consolidated income statement data prepared in accordance with U.S. GAAP. Some of these limitations include, but are not limited to:

Adjusted net income, EBITDA and adjusted EBITDA do not reflect the Company's cash expenditures or future requirements for capital expenditures or contractual commitments;

They do not reflect changes in, or cash requirements for, the Company's working capital needs;

They do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on the Company's debt;

They do not reflect income taxes or the cash requirements for any tax payments;

Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future, and adjusted net income, EBITDA and adjusted EBITDA do not reflect any cash requirements for such replacements;

While share-based compensation is a component of cost of revenues and operating expenses, the impact on the Company's financial statements compared to other companies can vary significantly due to such factors as assumed life of the options and assumed volatility of the Company's ordinary shares; and

Other companies may calculate adjusted net income, EBITDA and adjusted EBITDA differently than the Company does, limiting their usefulness as comparative measures.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are based on the effective exchange rate of 6.2046 as of December 31, 2014.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the outlook for the first quarter and full year 2015 and quotations from management in this announcement, as well as ChinaCache's strategic and operational plans, contain forward-looking statements. ChinaCache may also make written or oral forward-looking statements in its reports filed or furnished to the U.S. Securities and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statements, including but not limited to the following: the Company's goals and strategies, expansion plans, the expected growth of the content and application delivery services market, the Company's expectations regarding keeping and strengthening its relationships with its customers, and the general economic and business conditions in the regions where the Company provides its solutions and services. Further information regarding these and other risks is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and ChinaCache undertakes no duty to update such information, except as required under applicable law.

Condensed Consolidated Balance Sheets

(amounts in thousands)

As of Dec 31

As of Dec 31

As of Dec 31

2013

2014

2014

RMB

RMB

US$

(Audited)

(Unaudited)

(Unaudited)

ASSETS

Current assets

Cash and cash equivalents

338,092

375,879

60,581

Restricted Cash

60,000

68,191

10,990

Accounts receivable, net

306,237

319,494

51,493

Prepaid expenses and other current assets

50,549

55,374

8,925

Short term investment

24,636

25,219

4,065

Deferred tax assets

7,096

20,658

3,329

Amount due from a related party

141

--

--

Total current assets

786,751

864,815

139,383

Non-current assets

Property and equipment, net

240,650

418,886

67,512

Cloud infrastructure construction in progress

12,236

283,475

45,688

Intangible assets, net

5,563

10,321

1,663

Land use right, net

50,730

49,697

8,010

Long term investments

33,690

46,950

7,567

Deferred tax assets

1,719

980

158

Long term deposits and other non-current assets

35,829

56,084

9,039

Total non-current assets

380,417

866,393

139,637

Total Assets

1,167,168

1,731,208

279,020

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities

Short-term loan

60,000

60,000

9,670

Accounts payable

203,750

255,821

41,231

Accrued employee benefits

43,922

45,016

7,255

Accrued expenses and other payables

157,075

411,803

66,371

Income tax payable

10,399

21,374

3,445

Liabilities for uncertain tax positions

11,540

11,739

1,892

Amounts due to related parties

862

18

3

Current portion of long term liabilities

--

7,180

1,157

Current portion of capital lease obligations

--

13,794

2,223

Deferred government grant

24,360

37,360

6,021

Total current liabilities

511,908

864,105

139,268

Non-current liabilities

Long-term loan

--

11,520

1,857

Non-current portion of capital lease obligations

--

20,592

3,319

Deferred tax liabilities

2,127

44

7

Total non-current liabilities

2,127

32,156

5,183

Total Liabilities

514,035

896,261

144,451

Total Shareholders' equity

653,133

834,947

134,569

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

1,167,168

1,731,208

279,020

Condensed Consolidated Statements of Comprehensive Income

(amounts in thousands, except for number of shares, per share and per ADS data)

For the Three Months Ended

For the Twelve Months Ended

Dec 31, 2013

Sep 30, 2014

Dec 31, 2014

Dec 31, 2014

Dec 31, 2013

Dec 31, 2014

Dec 31, 2014

RMB

RMB

RMB

US$

RMB

RMB

US$

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

(Audited)

(Unaudited)

(Unaudited)

Net revenues

339,373

375,258

338,850

54,613

1,103,243

1,384,273

223,104

Cost of revenues

(232,203)

(261,371)

(237,157)

(38,223)

(756,617)

(966,558)

(155,781)

Gross profit

107,170

113,887

101,693

16,390

346,626

417,715

67,323

Sales & marketing expenses

(38,017)

(30,637)

(29,175)

(4,702)

(124,578)

(127,843)

(20,605)

General & administrative expenses

(43,409)

(42,523)

(73,797)

(11,894)

(153,568)

(190,980)

(30,780)

Research & development expenses

(30,555)

(30,035)

(28,113)

(4,531)

(102,704)

(116,381)

(18,757)

Impairment of an available-for-sale investment

(1,217)

--

--

--

(1,217)

--

--

--

Operating (loss)/income

(6,028)

10,692

(29,392)

(4,737)

(35,441)

(17,489)

(2,819)

Interest income

459

863

1,052

170

2,513

5,529

891

Interest expense

(1,275)

(1,965)

(3,192)

(514)

(3,584)

(8,220)

(1,325)

Other income

3,973

88

3,098

499

6,886

6,298

1,015

Foreign exchange (loss)/gain, net

(1,735)

(6,409)

4,814

776

(3,308)

3,944

636

--

(Loss)/income before income taxes

(4,606)

3,269

(23,620)

(3,806)

(32,934)

(9,938)

(1,602)

Income tax (expense)/benefit

(9,410)

(2,646)

2,981

480

(1,295)

3,097

499

--

Net (loss)/income attributable to ordinary shareholders

(14,016)

623

(20,639)

(3,326)

(34,229)

(6,841)

(1,103)

--

Foreign currency translation

(2,328)

1,687

(1,857)

(299)

(1,975)

46

7

Unrealized holding gains arising during the period

232

141

200

32

1,821

583

94

Reclassification adjustments for gains included in net loss

(499)

--

--

--

(1,912)

--

--

Total other comprehensive (loss)/income, net of tax

(2,595)

1,828

(1,657)

(267)

(2,066)

629

101

--

Comprehensive (loss)/income

(16,611)

2,451

(22,296)

(3,593)

(36,295)

(6,212)

(1,002)

(Loss)/earnings per ordinary share:

Basic

(0.04)

0.00

(0.05)

(0.01)

(0.09)

(0.02)

(0.00)

Diluted

(0.04)

0.00

(0.05)

(0.01)

(0.09)

(0.02)

(0.00)

(Loss)/earnings per ADS*:

Basic

(0.61)

0.02

(0.80)

(0.13)

(1.51)

(0.27)

(0.04)

Diluted

(0.61)

0.02

(0.80)

(0.13)

(1.51)

(0.27)

(0.04)

Weighted average number of ordinary shares used in earnings per share computation: